Knowing What Are, and What Are Not, Travel Expenses

Whether you are a business owner, or an employee, you can deduct travel expenses from your taxes. The one caveat is that the expenses cannot be reimbursed. So if you drive 500 miles, but the boss buys your gas, you can’t deduct your mileage. But no matter what your industry, and no matter what your job, you can likely deduct some of your business expenses and help to lower your tax bill. Your accountant in Billings, Montana explains how this is done.

What Are Travel Expenses

Before you can start writing off business expenses, you have to be aware of what travel expenses actually are. If you are taking the family to Disney World, and you decide to pop into the manager’s office at a nearby restaurant to talk about your business, you legally should not be trying to deduct the trip. Instead, the primary purpose of the trip must be business related (but that doesn’t mean you can’t do some entertainment type stuff while there).

When you are traveling you can deduct costs for most of the following:

• – 50% of the costs of meals, or you can take the per diem rate, this is usually about $83 per day
• – Airfare and incidentals
• – Cab fare, bus fare, or other transportation
• – Hotel expenses
• – Tips
• – Other expenses if they directly relate to the business at hand

There are some other things that can be deducted, it all depends on the trip, where you will be going, and what the business activity entails. Your best bet is to just save all of your receipts while you travel for business, and then turn them in to your accountant in Billings, Montana when the time comes. You can always organize them out in a spreadsheet to make things easier.

Deducting Mileage for Travel

Sometimes you have to take a shorter trip. You plan to travel a hundred miles or so, spend the day, and travel back. There are no big expenses like hotel rooms, airfare, and often there aren’t even meals eaten. In these cases, you can still claim some deductions for business expenses.

As long as you are using your personal vehicle, not a company car, you can deduct $.575 for every mile you drove (for 2015, this is up from $.56 in tax year 2014). This means that if you drive 100 miles round trip, you can write off $57.50 from your taxes next year. Keep in mind that you can’t write off the miles that you use to commute; so from home to office is not deductible.

If you do a lot of traveling, say 500 miles per week, you would be able to write off thousands of dollars worth of miles. Keep in mind though, if you write off the miles, you can’t deduct the cost of tires, gas, oil, and other maintenance for your vehicle.

Practical Taxes Know the Rules on Travel Expenses

Knowing what you can, and cannot, deduct for business related travel can become quite confusing. Fortunately, that is why Practical Taxes is around. We know and understand taxes, and can help you wade through the conundrum. As long as you keep accurate records, we can help you to get the maximum amount of deductions possible.

We can help with tax preparation, business consultation, online payroll, and more. Call us today at 406-894-2050 to learn more!